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Pareto Optimal Solutions in Economics Essay


Needs are those motivations that make people act and develop. The same is true for the country’s economics. While human beings require clothes, knowledge, and interactions, enterprises need equipment and labor (Dopfer & Potts, 2015). Taking into consideration the fact that the world’s population is growing and the number of businesses increases rapidly, it is critical to pay attention to the resources used to fulfill diverse needs. Unfortunately, their amount is rather limited while needs are only increasing. An optimal economic solution that can resolve this issue presupposes the provision of the maximum result at the minimum of costs, which can be aligned with the Pareto Optimal Solution in the framework of which “there is no way of improving any objective without degrading at least one other objective” (Manne, 2016, para. 7). In this way, the optimal economic solution should be the one that leads to minimizing harm.

In some cases, it is not possible to reach the maximum result at the minimum of cost without affecting the possibility to reach other needs adversely (Veselovsky, Gnezdova, Romanova, Kirova, & Idilov, 2015). For instance, the development of a country’s economy requires land, labor, and capital (Leigh & Blakely, 2016). However, if many factories and office buildings are put in one place, there will be not enough space to locate new businesses and provide people with accommodation. A set of Pareto optimal solutions can be developed to find out a way to overcome this issue. Each solution reveals a possibility to minimalize associated disadvantages. With its help, it is easier for a professional to select the best option to be used in practice. Thus, Pareto optimal solutions are worth using when trying to find an optimal solution for the lack of resources required to fulfill the diverse needs of the country’s economy.

References

Dopfer, K., & Potts, J. (2015). The general theory of economic evolution. New York, NY: Routledge.

Leigh, N. G., & Blakely, E. J. (2016). Planning local economic development: Theory and practice (6th ed.). Thousand Oaks, CA: Sage Publications.

Manne, J. (2016). Web.

Veselovsky, M. Y., Gnezdova, J. V., Romanova, J. A., Kirova, I. V., & Idilov, I. I. (2015). The strategy of a region development under the conditions of new actual economic. Mediterranean Journal of Social Sciences, 6(5), 310-317.

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IvyPanda. (2020, September 2). Pareto Optimal Solutions in Economics. Retrieved from https://ivypanda.com/essays/pareto-optimal-solutions-in-economics/

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"Pareto Optimal Solutions in Economics." IvyPanda, 2 Sept. 2020, ivypanda.com/essays/pareto-optimal-solutions-in-economics/.

1. IvyPanda. "Pareto Optimal Solutions in Economics." September 2, 2020. https://ivypanda.com/essays/pareto-optimal-solutions-in-economics/.


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IvyPanda. "Pareto Optimal Solutions in Economics." September 2, 2020. https://ivypanda.com/essays/pareto-optimal-solutions-in-economics/.

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IvyPanda. 2020. "Pareto Optimal Solutions in Economics." September 2, 2020. https://ivypanda.com/essays/pareto-optimal-solutions-in-economics/.

References

IvyPanda. (2020) 'Pareto Optimal Solutions in Economics'. 2 September.

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